New report highlights some of the most important developments that shippers should be watching as the year progresses
There’s no end in sight to the driver shortage, the electronic logging device (ELD) mandate is now in full force, and the regulatory landscape isn’t getting any less murky for carriers. These are just a few of the key developments that shippers should be keeping an eye on in 2018 as the transportation landscape continues to evolve and morph.
In its 2018 Transportation Market Outlook, USI highlights these potential pain points for the trucking industry this year:
- The Driver Shortage. A major issue for the industry, the U.S. truck driver shortage is making it very difficult to find qualified drivers in a field where the rate of employee turnover for many transportation companies exceeds 60 percent. The American Trucking Association estimates that turnover of a single driver can result in a loss of $7,000 to $10,000, USI reports.
- Increased regulation. The trucking industry faces numerous regulations that are increasing the cost to operate and hurting its bottom line, according to USI. “Carriers will continue to navigate through these rules in 2018.” The changes include:
- Electronic Logging Device (ELD) mandate – This law requires all interstate motor carriers to have their trucks equipped with electronic logging devices.
- CSA Basic Scores – The Federal Motor Carrier Safety Administration (FMCA) compiles and publishes compliance, safety, and accountability (CSA) data that is used to rank and prioritize motor carriers for possible intervention. Increasingly, insurers are using the CSA data to make underwriting and pricing decisions,” USI reports. For example, a high CSA rating could affect rates because it might indicate that a driver is a high risk.
- Food Modernization Safety Act (FMSA-2016) – This law also is creating additional liabilities for motor carriers transporting human and animal food products, according to USI. It requires shippers, loaders, carriers by motor or rail vehicle, and receivers to use sanitary practices to ensure the safety of the food.
- A Shaky Insurance Marketplace. In 2017, numerous insurance companies exited the trucking marketplace. In addition, several truck insurers had their financial strength ratings downgraded or put under negative watch outlook, USI reports, noting that this year, motor carriers with good loss histories are expected to experience 3% to 5% in rate increases; average accounts could see increases of 5% to 10%; and below average performers are likely to see double-digit to massive spikes in insurance rates.
Every year brings a new host of challenges for shippers, and this one isn’t any different. Through good planning, leveraging the power of reliable logistics partners, and strong relationships with carriers, companies can effectively work through the ebbs and flows and continue to build their bottom lines in any freight or regulatory environment.